Government failed to collect £22bn owed to it

Government failed to collect £22bn owed to it

More than two-thirds is owed to HM Revenue and Customs, with the Department for Work and Pensions and justice ministry accounting for most of the rest.

The government has been criticised in a select committee report for failing to collect £22bn in unpaid debts.

Ministers failed to take a strategic approach to collecting the money it was owed, the public accounts committee found, after the National Audit Office calculated the figure from studying records up to March last year.

More than two-thirds of the debt was owed to HM Revenue and Customs with the Department for Work and Pensions and the Ministry of Justice accounting for most of the remainder.

The report follows several years of critical reports from the parliamentary watchdog and the National Audit Office of the government’s attempts to collect its debt.

“The government is owed this massive amount of money but it has failed to take a strategic, cross-government approach to managing that debt and getting more money paid to the Exchequer,” said the committee’s chair, Margaret Hodge.

“Instead, its treatment of debt has been characterised by neglect and periodic large write-offs,” she added.

In its report, the committee warned that failure to minimise the volume of debt outstanding – ranging from unpaid fines and taxes to overpaid tax credits – was having a direct impact on government borrowing.

“Government inaction has led to large volumes of old debts building up, which are unlikely to be collected,” the committee said.

“While the Treasury and the Cabinet Office say they are belatedly developing a cross-government strategy for debt, we are concerned that the centre has taken so long to drive improvements in debt collection, given that this should be a basic business activity, and given the huge volume of bad debts that are written off each year.”

A government spokesman said Whitehall had succeeded in saving £6.5bn through its efforts to tackle fraud, error and debt. “Before 2010, Whitehall did not know how much overdue debt was owed to government and departments weren’t working together to address it,” the spokesman said.

  • The Guardian, 

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